Valeant sets sizes, breaks; Tomkins frees up; Advance Pierre tweaks deal; Angelica sets talk

By Sara Rosenberg

New York, Sept. 21 - Valeant Pharmaceuticals International Inc. firmed up tranche sizes on its credit facility and then proceeded to free up for trading, and Tomkins plc's credit facility hit the secondary as well.

Also in trading, DaVita Inc.'s term loan B was higher with refinancing news, and Nalco Co.'s term loan B softened on its refinancing plans.

In other news, Advance Pierre Foods increased pricing on its second-lien term loan and added some more call protection, Angelica Corp. started circulating price talk on its credit facility, DineEquity Inc. came out with the timing, size and structure on its deal, and AutoTrader.com launched its term loan.

Also, talk is that Reynolds Group Holdings Ltd. may be coming out with some changes to its credit facility since it has been so well received by the market.

Furthermore, Knology Inc.'s credit facility has attracted a lot of attention, and CHG Healthcare Services is heard to be moving along nicely as well.

Valeant firms tranching

Valeant finalized sizes on its term loans, with the term loan B ending up at $625 million, including a $125 million delayed-draw tranche, according to market sources. Most recently, the term loan B, including the delayed-draw, had been talked in the $625 million to $675 million area after being downsized from $875 million - divided into $725 million of funded and $150 million of delayed-draw.

Meanwhile, the term loan A ended up at $1 billion, sources said. The tranche had been talked in the $950 million to $1 billion context after being upsized from $750 million.

The company's $1.75 billion credit facility also includes a $125 million revolver, which was downsized from $250 million when the initial changes were made to the term loans.

Valeant pricing

Pricing on Valeant's revolver, term loan A, term loan B and delayed-draw term loan B is Libor plus 400 basis points.

The term loan B has a 1.5% Libor floor and was sold at an original issue discount of 99, and the delayed-draw loan has an undrawn fee of 75 bps.

The revolver and the term loan A were sold with upfront fees based on commitment size.

By comparison, the term loan B was initially talked at Libor plus 400 bps to 425 bps with a 1.75% Libor floor and an original issue discount of 981/2, and the revolver and term loan A were initially talked at Libor plus 375 bps to 400 bps.

Goldman Sachs, Morgan Stanley and Jefferies are the joint lead arrangers and joint bookrunners on the deal, with Goldman the administrative agent and the left lead.

Valeant frees to trade

After tranche sizes were determined, Valeant's credit facility allocated and hit the secondary market, with the term loan B and delayed-draw term loan strip seen around the 101 context, according to traders.

Specifically, the strip was quoted by one trader at par ¼ bid, par ¾ offered on the break and then he saw it move up very quickly to par ¾ bid, 101 offered, while a second trader had it at par 5/8 bid, 101 1/8 offered.

Proceeds from the credit facility, along with $1.2 billion of notes, will be used to fund a merger with Biovail Corp. and to refinance existing debt, including Valeant's 7 5/8% and 8 3/8% senior unsecured notes.

All stockholders of the merged company are expected to receive an additional one-time $1.00 per share special dividend by Dec. 31. Funding for the dividend will come from the delayed-draw term loan B.

Aliso Viejo, Calif.-based Valeant and Mississauga, Ont.-based Biovail are specialty pharmaceutical companies. The combined company will be based in Mississauga and will be named Valeant Pharmaceuticals International Inc.

Tomkins starts trading

Another deal to free up for trading on Tuesday was Tomkins' credit facility, with its $1.7 billion six-year term loan B seen by one trader at par ¾ bid, 101¼ offered on the break before coming in to par 5/8 bid, 101 offered. A second trader had the tranche quoted at par ¾ bid, 101 offered.

Pricing on the term loan B is Libor plus 450 bps with a 1.75% Libor floor, and it was sold at an original issue discount of 99. There is 101 soft call protection for one year.

During syndication, the term loan B was upsized from $1 billion, pricing was lowered from Libor plus 475 bps and the discount firmed at the tight end of the initial 98 to 99 talk.

The company's $2.3 billion credit facility (Ba2) also includes a $300 million revolver and a $300 million term loan A.

Citigroup and Bank of America are the lead arrangers and joint bookrunners on the deal, with Barclays Capital, RBC Capital Markets and UBS bookrunners as well.

Tomkins being acquired

Proceeds from Tomkins' credit facility will be used to help fund its buyout by Pinafore Acquisitions Ltd., a company jointly owned by Onex Corp. and Canada Pension Plan Investment Board, for 325p per share in cash.

Other funding for the buyout of Tomkins will come from $1.15 billion of second-lien bonds and about $2 billion of equity.

The second-lien notes offering was upsized from $1 billion and, as a result, the equity portion was downsized, and a $600 million secured notes tranche was terminated upon the term loan B upsizing.

Also, the company reduced the amount that it expects to draw under its revolver by $100 million because of the term loan B upsizing.

Closing on the transaction is expected to take place on Sept. 24.

Tomkins is a London-based engineering and manufacturing group providing products for the industrial, automotive and building products markets.

DaVita rises on refi

DaVita's term loan B moved higher as the company said that it will be refinancing all $1.8 billion of outstanding bank debt, as well as its $700 million of its 6 5/8% senior notes due 2013 and $850 million of its senior subordinated notes due 2015, according to a trader.

The term loan B was quoted at 99¾ bid, par ¼ offered, up from 99½ bid, par offered, the trader said.

To fund the refinancing, the company plans on getting a new secured credit facility and unsecured debt.

In addition, the company intends to seek additional financing for general corporate purposes and other opportunities, including potential acquisitions, share repurchases and other growth investments.

JPMorgan, Bank of America and Credit Suisse are the lead banks on the credit facility.

DaVita estimated numbers

In connection with announcing the refinancing plans, DaVita revealed estimates of some third-quarter results. Actual third-quarter results are expected to be released on Nov. 4.

The company said in a news release that it expects operating income for the third quarter in the range of $254 million to $260 million.

Diluted earnings per share for the quarter are estimated in the range of $1.11 to $1.14, which is consistent with previous expectations.

And, the company narrowed its operating income guidance for full-year 2010 to a range of $985 to $1.02 billion.

DaVita is a Denver-based provider of dialysis services.

Nalco term loan slides

Nalco's term loan B moved in to 99¾ bid, par ¼ offered from par 3/8 bid, par ¾ offered after news surfaced that the company will be refinancing the debt, according to a trader.

Funds for the refinancing will come from a new $100 million term loan C-1 and a new $650 million term loan B-1, which are set to launch with a conference call on Thursday.

The term loan C-1 is expected to come in line with the existing term loan C that is priced at Libor plus 175 basis points, while price talk on the term loan B-1 is not yet available, the source added.

Deutsche Bank is the lead bank on the deal for the Naperville, Ill.-based manufacturer and seller of specialized service chemical programs.

Advance Pierre lifts second-lien pricing

Switching back to the primary, Advance Pierre Foods flexed pricing higher on its $230 million second-lien term loan to Libor plus 950 bps from Libor plus 875 bps and changed the call protection to non-callable for one year, then at 103 in year two, 102 in year three and 101 in year four, from 103 in year one, 102 in year two and 101 in year three, sources said.

As before, the second-lien loan is being offered with a 1.75% Libor floor and original issue discount of 98.

The company's $1.14 billion credit facility also includes a $75 million ABL revolver and an $835 million first-lien term loan (B1/B+) that is talked at Libor plus 525 bps with a 1.75% Libor floor, a discount of 98, and 101 soft call protection for one year.

The change to the second-lien loan is not surprising given that market chatter has been that while the first-lien loan is coming along fine, the second-lien has been having a little bit of a harder time attracting interest.

Advance Pierre merger

Advance Pierre Foods' credit facility is being obtained in connection with the creation of the company through the merger of Pierre Foods Inc., Advance Food Co. Inc. and Advance Brands LLC.

Following completion of the merger, Oaktree Capital Management, the current majority shareholder of Pierre Foods, will maintain a majority share of the combined company. The current shareholders of Advance Food, the Allen and McLaughlin families, will own a minority share of the combined company.

Credit Suisse, Barclays Capital, Morgan Stanley and BMO Capital Markets are the lead banks on the credit facility, with Credit Suisse the left lead.

Advance Pierre Foods will be a Cincinnati-based supplier of value-added protein and handheld convenience food products to the foodservice, school, retail, club, vending and convenience store channels.

Angelica discloses guidance

Angelica released price talk on its proposed $185 million credit facility ahead of the Oct. 4 bank meeting as the deal is currently being shown to select group of investors, according to a market source.

The $35 million five-year revolver and $50 million five-year term loan A are being talked at Libor plus 500 bps to 525 bps, with the revolver having a 75 bps unused fee.

And, the $100 million six-year term loan B is being talked at Libor plus 525 bps to 575 bps with a 1.75% Libor floor and an original issue discount of 98, the source remarked.

Macquarie and Jefferies are the joint lead arrangers on the deal that will be used to fund a $35 million dividend payment to the sponsor, Trilantic Capital Partners, and to completely refinance an existing credit facility and mezzanine debt.

Pro forma first-lien/total leverage will be 3.5 times.

Angelica is a St. Louis-based provider of outsourced linen management services to the health care industry.

DineEquity launch, structure

DineEquity announced that it will be holding a bank meeting on Thursday at 10 a.m. ET at the Palace Hotel in New York to launch its proposed up to $975 million credit facility, according to a market source.

The facility consists of a $900 million seven-year term loan B and a $50 million to $75 million five-year revolver, the source said.

Price talk is not being given out as of yet.

Previously, it was known that the deal would be September business, but specific timing and size/structure on the facility were not available.

DineEquity selling notes

In addition to the credit facility, DineEquity plans on approaching the high-yield market with a bond offering.

Proceeds from the new loan and bond debt will be used to refinance existing debt, including the company's $1.385 billion of notes.

Senior leverage is 3.5 times and total leverage is 5.7 times.

Barclays and Goldman Sachs are the lead banks on the credit facility, with Barclays the left lead.

Corporate ratings are expected in the single-Bs.

DineEquity is a Glendale, Calif.-based owner of Applebee's Neighborhood Grill & Bar and IHOP Restaurants.

AutoTrader.com launches

AutoTrader.com held a conference call on Tuesday afternoon to launch a $100 million incremental term loan, and at that time, price talk emerged as Libor plus 450 bps with no Libor floor and an original issue discount of 991/2, according to a market source.

Wells Fargo and Goldman Sachs are the lead banks on the deal that will be used to fund the acquisition of vAuto, an Oak Brook, Ill.-based provider of advanced software tools for used vehicle management, pricing and inventory optimization.

Commitments are due on Oct. 5.

Total leverage is 2.9 times.

AutoTrader.com is an Atlanta-based automotive marketplace and consumer information website.

Reynolds could see revisions

Reynolds Group's $1.5 billion in new term loans (Ba3/BB) may see some issuer-friendly modifications being that the debt is strongly oversubscribed ahead of Monday's commitment deadline, according to a market source.

Currently, the debt is comprised of a $1 billion term loan B talked at Libor plus 500 bps with a 2% Libor floor and an original issue discount of 98, and a $500 million term loan A talked at Libor plus 450 bps with a 2% Libor floor and an original issue discount of 99.

The term loan B includes 101 soft call protection for one year.

Credit Suisse, HSBC and Australia and New Zealand Banking Group are the lead banks on the deal.

Reynolds buying Pactiv

Proceeds from Reynolds' term loans will be used to help fund the acquisition of Pactiv Corp. for $33.25 in cash per share for a total purchase price of $4.6 billion. However, the transaction is valued at $6 billion.

Other funding for the transaction will come from $3.5 billion of bonds and roughly $2 billion of equity.

Closing is targeted by the end of this year, subject to Pactiv shareholder approval, regulatory approvals and customary conditions. The acquisition is not conditioned on the receipt of equity or debt financing.

Reynolds is a Chicago-based manufacturer and supplier of consumer food and beverage packaging and storage products. Pactiv is a Lake Forest, Ill.-based consumer and foodservice/food packaging company.

Knology well met

Knology's $770 million credit facility (B1/B+) has also being seeing strong demand from lenders, resulting in oversubscription with there still being more than a week left till the Sept. 29 commitment deadline, according to a market source.

The facility consists of a $50 million revolver talked at Libor plus 400 bps, a $150 million term loan A talked at Libor plus 400 bps and a $570 million term loan B talked at Libor plus 450 bps with a 1.75% Libor floor and an original issue discount of 981/2.

Credit Suisse and SunTrust are the lead banks on the deal that will be used, along with cash on hand, to fund the acquisition of Sunflower Broadband for $165 million in cash and to refinance existing debt.

Knology is a West Point, Ga.-based provider of interactive communications and entertainment services. Sunflower is a provider of video, voice and data services to residential and business customers.

CHG sees interest

CHG Healthcare Services' $355 million credit facility is heard to be "coming along well" while there remains about another week before commitments are due, according to a market source.

The facility consists of a $70 million revolver, a $225 million first-lien term loan and a $60 million second-lien term loan.

The revolver and first-lien term loan are both being talked at Libor plus 500 bps to 550 bps, and the second-lien loan is being talked at Libor plus 900 bps to 950 bps.

The revolver is being offered with upfront fees that are not currently being disclosed, the first-lien term loan is being offered at an original issue discount of 98 and has 101 soft call protection for one year, and the discount and call protection on the second-lien term loan are still to be determined.

All tranches have a 1.75% Libor floor.

CHG lead banks

Barclays, Bank of America and Goldman Sachs are the lead banks on CHG Healthcare Services' credit facility, with Barclays the left lead.

Proceeds will be used to repay debt and fund a dividend.

The company is expected to get high single-B corporate ratings, and leverage is 3.5 times through the first-lien and just under 4.5 times total.

CHG is a Salt Lake City-based health care staffing provider.

Brickman readies launch

In more primary happenings, Brickman Group Ltd. emerged with plans for a new deal, scheduling a bank meeting for Friday morning to launch a $550 million credit facility, according to a market source.

Barclays and Bank of America are the lead banks on the deal that consists of a $50 million five-year revolver and a $500 million six-year covenant-light term loan, the source said.

Proceeds will be used to find a dividend payment and to refinance existing debt.

Brickman is a Gaithersburg, Md.-based commercial landscaping company.

Hilex Poly coming soon

Also announcing plans for a new deal was Hilex Poly Co., with it set to hold a bank meeting on Thursday to launch a 160 million six-year term loan, according to a market source.

Deutsche Bank and GE Capital are the lead banks on the deal that will be used to refinance existing debt and fund a dividend.

Hilex Poly is a Hartsville, S.C.-based producer of recycled content plastic bags and recycler of plastic bags and film.

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